As the year 2017 had come to its end, the real estate market had not proven to slow down with regards to sales pace. In fact, existing home sales for November in particular had seen their strongest pace in nearly 11 years. Total existing home sales are defined as transactions of single-family homes, townhomes, condos and co-op properties. These sales jumped by 5.6% for the month of November which brought sales 3.8% higher than the previous year and to their best pace seen since December of 2006.
Lawrence Yun, NAR chief economist, states that home sales in most of the country expanded at a tremendous clip in November. “Faster economic growth in recent quarters, the booming stock market and continuous job gains are fueling substantial demand for buying a home as 2017 comes to an end,” he said. “As evidenced by a subdued level of first-time buyers and increased share of cash buyers, move-up buyers with considerable down payments and those with cash made up a bulk of the sales activity (in November). The odds of closing on a home are much better at the upper end of the market, where inventory conditions continue to be markedly better.”
While the sales pace increased, some other trends remained the same. The median price for all property types was up by 5.8% which marked the 69th consecutive month for year over year gains. Housing supply also had a typical story with a limited number of available homes for sale at 9.7% lower than the year prior. Available housing was showing a 3.4 month supply versus 2016’s at 4.0 months.
Regional Activity Breakdown
- The Northeast experienced a surge in existing home sales with an increase by 6.7% for the month of November. The median price had also increased over that of 2016 by 4%.
- The Midwest also surged substantially by 8.4% and was 6.8% higher than 2016. Median price had also shown an increase of 8.8% over 2016.
- The South’s home sales were boosted by 8.3% and were 4% higher than 2016. The median price was 4.8% higher than in 2016.
- The West was the only area showing a small decline with sales down by 2.3% yet still 2.5% higher than in 2016. The median price was also up and by 8.2% over November of 2016.
As we look ahead into 2018, historically low mortgage rates may play their part on market conditions if they increase. “The anticipated rise in mortgage rates (in 2018) could further cut into affordability if these staggeringly low supply levels persist,” said Yun. “Price appreciation is too fast in a lot of markets right now. The increase in homebuilder optimism must translate to significantly more new construction in 2018 to help ease these acute inventory shortages.”